USD/CNH Narrows In On Cycle Trough

USD/CNH slipped early on, but now trades off lows, last -102 pips at CNH6.5642. Price action has been driven by greenback gyrations, with little to provide any impetus from another quarter. The PBoC fix showed little deviation from estimates.

• Several top Chinese economic officials spoke at BBG New Economy Forum. Fang Xinghai, Vice Chair of the China Securities Regulatory Commission told the Forum that investors have responded "quite well" to the halt of Ant's IPO. The official noted that China wants to improve relations with the U.S. and there is a chance to do so under Biden administration, with both countries already cooperating well in the financial sector.
• Elsewhere, Dep Director of HK & Macau Office Zhang Xiaoming commented that China must continue to "perfect" legal systems in the two cities, adding that HK Basic Law must change amid new challenges.
• The key near-term bearish focus remains on CNH6.5475, which represents the two and a half year low printed on Nov 9. A break here would open up the psychological CNH6.5000 level. Conversely, a recoil above Nov 9 high of CNH6.6495 would encourage bulls to set their sights on the 50-DMA at CNH6.7168.
• As a reminder, Friday will see the latest LPR fixing from the PBoC.